Landed-cost and sourcing economics

We break an item's cost into supplier price, freight, insurance, duty, port and handling charges, inventory financing and exchange-rate effect, and build the model that shows what it costs by the time it can be used or sold. Two sourcing routes then sit side by side on the same basis, in dirhams, riyals, dinars or whichever currency the group reports in.

The duty line in the model rests on the classification and rates your customs broker confirms, and we price it beside freight and financing.

• A landed-cost model per item and per route, with every cost line separately visible.
• A route comparison paper: local against imported, one origin against another.
• A sensitivity table for freight, currency and delay, showing where the decision flips.
• A cash-in-transit schedule showing the working capital each route requires.
• A sourcing economics summary that links landed cost to the selling price and margin.

• Your board reads landed cost as a share of selling price, by product family.
• Quoted cost and actual landed cost sit side by side, so the gap shows.
• You see the days of cash tied up between supplier payment and sale.
• Buyers compare routes before they order, and you see the share of imports where they did.
• The sensitivity table shows how far margin moves with a freight or currency change.

A cheaper unit price can lose to a dearer one once freight, duty and the weeks of cash tied up in transit are counted. Most groups do not run the sum, so the cheapest quotation wins and the margin erodes at the port.

• Your import margin is lower than the quotation implied.
• A local supplier and an overseas supplier are compared on price per unit alone.
• Freight rises and no one can say which products it affects.
• Stock bought in bulk to win a discount is slow to sell, and its financing cost is not counted.
• Duty is added to the cost of goods after the price is already agreed with customers.

Finance heads and chief executives of importers, retailers, distributors, restaurant groups and manufacturers who buy across borders, and any group whose sourcing choice rests on a unit price from a quotation.

Qasim Abbas brought more than 20 companies across several countries onto one set of numbers, which is the standard a landed-cost model must meet. Every line in your model traces to a quotation, so your board can test it.

The model reads from your ledger exports, and our logistics cash cycle tool turns inventory, receivable and supplier days into the cash conversion cycle and the working capital it ties up. See how fees work.

How do you treat duty?

We model the cost on the classification and rate your customs broker confirms.

Why include financing cost?

Cash tied up in transit and stock has a cost to the group. The model charges a route that is cheaper per unit for the weeks of extra cash it ties up, so the comparison shows which one costs less.

Bring one imported item with its quotation and last clearance invoice to a private briefing. We return its landed cost and show what that changes about the sourcing decision.